The West hasn't run out of water, but there's no longer enough for everyone who needs it. Urban growth and drought have boosted demand for water and crimped supply.

Something has to give, and it's looking like the giver will be agriculture, as thirsty cities and suburbs increasingly buy up water rights to ranches, hay farms and other ag enterprises.

Water that once supplied cattle and hay fields is now being shifted to fast-growth areas such as greater Denver, Las Vegas and southern California.

The implications of this shift are profound. Beef producers with expansion hopes may find themselves with fewer options because land without water is of limited use. In addition, the infrastructure of rural communities will suffer as ag shrinks, leaving fewer customers for farm supply and equipment dealers.

These issues create friction between rural communities and the cities that are buying up water. They also spur tension between producers who willingly sell their water rights and leave, and those who stay behind to continue in agriculture.

“When people see the water going away, it's an indication their community is changing, and there's a lot of emotion about that,” says Melissa Elliott, manager of public relations for the water department in Aurora, CO, a Denver suburb that's been acquiring ag water rights to supply its 305,000 residents.

The water rights situation is one factor among many working to reduce western ranching's viability. An ongoing drought has forced many producers to cut the size of their herds. Meanwhile, large numbers of western ranches are being sold for subdivisions and ranchettes, or to wealthy buyers more interested in gazing at the region's scenery than raising cattle.

While the sale of water rights has been taking place for years, it may be gaining momentum. Drought has crimped profits and made some producers more willing to sell their rights. At the same time, drought has made cities more anxious to lock in long-term water supplies.

“Every metropolitan community in the West is looking for water,” says John Carpenter, a retired rancher and Nevada state assemblyman. “In Phoenix, they're buying up farms and putting up houses. Here in Nevada, they're going to take water so they can put up houses in Las Vegas and have water for their humongous hotels.”

In the past, water shortages were solved by drilling more wells, or damming rivers to create new reservoirs. Neither are good options today.

“Because it's so hard to build new reservoirs or obtain permits to drill new water wells, the only option cities have is to buy ag water,” says Neil Grigg, a Colorado State University water specialist and civil engineering professor. “It's a very strong trend.”

On the surface, the sale of water rights seemingly solves two problems. It puts cash in the pockets of producers who may need it, and water where the people are. But the shift may entail environmental costs.

“You won't have wetlands,” Grigg says. “And if you don't take conservation measures, you may get soil loss, which means you could get dust storms.”

Sometimes the needs of ag and urban areas can be met without leaving ranches high and dry. For instance, producers can shift their water to cities for a specified period while retaining their water rights. Some cities have taken advantage of these short-term transfers to meet their immediate needs during drought. The producers who supply them often have water to spare because they've scaled back cattle and hay operations until the drought ends. The cash they get for the transfers helps them hang on.

But often, the water rights are being sold permanently to the long-term detriment of agriculture. Still, sometimes it's possible for a city to acquire water rights while leaving an opening for continued ranch operations. Cheyenne, WY, is a case in point.

Cheyenne bought the 17,000-acre Belvoir Ranch as a way to accommodate future growth, and a hedge against continued drought. The city believes it can get at least 1 billion gals. of water/year from the ranch's aquifers once it installs the infrastructure to tap the site. But the surface water rights from streams on the land remain intact as a source of water for livestock, and the city is leasing some of the land for grazing.

Doug McInnis is a Casper, WY-based freelance writer on management and business topics.

Two views

Thirsty cities and drought-stricken ranchers agree on one thing — there isn't enough water for everyone. Beyond that, they tend to see the issue of who gets water very differently. Here are two views of the western water shortage — one from the prospective of a Nevada ranching area, the other of a water-short suburb of Denver.

Northeast Nevada doesn't have many people, but it has water. Las Vegas is short on water, but as the fastest growing major city in the U.S., it has plenty of people — and they need water. To satisfy the burgeoning water needs of Las Vegas, the Southern Nevada Water Authority plans a $2-billion pipeline to route water from northeast Nevada to the city.

That doesn't sit well with some northeast residents who fear ranches will eventually end up short on water.

“The authority says they're not going to buy ranch water rights,” says John Carpenter, a retired rancher and state assemblyman representing northeast Nevada. But Carpenter suspects the quantity of water the authority has lined up isn't sufficient to fill the pipeline. And when push comes to shove, the authority will look toward ranch water to keeps its pipeline full.

“If they build this pipeline and don't get the water they planned on, the only option is to start buying ranch water rights,” he says. “There's no question this would destroy the ranching industry in this part of the state. You'd be taking water out of what's already a desert.

“They made application years ago for this water. I guess a lot of us were asleep at the switch and never protested it because we didn't think Las Vegas would grow the way it has,” Carpenter says. “Las Vegas' appetite for water is practically unlimited.”

Aurora, CO, began to develop its water system in the 1950s. But when it acquired water rights, they were often secondary to older cities such as Denver, which had much older rights.

In a pinch, cities like Denver get first shot at limited water supplies, which put Aurora in a bind when the drought hit.

“In 2003, our reservoirs were 23% full,” reports Aurora Water Department official Melissa Elliott. “That's just nine months short of being dry.”

To solve its problem, Aurora has been buying ranch and farm properties, including a large but unused ranch near Leadville with plentiful water rights for growing hay. But Aurora needs still more water, both for the 300,000 residents it already has and the 200,000 it expects to add by 2035.

“Regardless of the people to come, we don't have enough water for the people who are here today,” Elliott says.

“The people who are selling to us are always willing sellers,” she says. “We're approached weekly by people with water rights they want to sell. For a lot of people in ag, water rights are their 401-K retirement plan. When it comes time to downsize or retire, it's an asset they can cash in.”

Besides buying water rights, the city has begun a stringent water conservation program to cut demand. Meanwhile, the drought grinds on. By the end of June, Aurora would normally have had 7 in. of precipitation; this year, the city's received less than 2 in.

“Our climatologists are speculating that this is the new “normal',” Elliott says. “If it is, that's frightening.”